Interview with House Majority Leader Eric Cantor; Another Record Quarter For Apple; What Does Pelosi Know?; Interview with Senator John McCain; "Defining Issues of Our Time"; Date Night at the State of the Union

Aired January 25, 2012 - 08:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. Welcome, everybody.

We're coming to you live from The Diner this morning in Washington, D.C.

And our STARTING POINT is some breaking news: two foreign workers, aid workers, who were kidnapped in Somalia three months ago are now free this morning. We have some new video to show you that the two were in the hands of their captors, that they are now free. We'll update you on what happened in that story.

Plus, reaction to the State of the Union address. The president is pushing for millionaires to pay more money. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Tax reform should follow the Buffett Rule. If you made more than $1 million a year, you should not pay less than 30 percent in taxes.

(END VIDEO CLIP)

O'BRIEN: Plus, Newt Gingrich is gunning for the GOP nomination, but Nancy Pelosi says it is not going to happen. What does Nancy Pelosi know that we don't?

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), CALIFORNIA: Let me just make my prediction and stand by it. It isn't going to happen.

JOHN KING, HOST, "JOHN KING, USA": Why are you so sure?

PELOSI: There's something I know.

(END VIDEO CLIP)

O'BRIEN: That's interesting. Going to talk about that this morning. Thank you very much.

STARTING POINT begins right now.

(MUSIC)

O'BRIEN: I like that music. Let's play more of that in the morning. We're still working out our musical issues. I think it's fair to say.

Welcome, everybody. You're watching STARTING POINT. And we're coming to you from The Diner in Washington, D.C., this morning.

I have moved right into the French toast. Do you know, I have gained five pounds since we started this show three weeks ago? No joke. So, tomorrow is fresh fruit only.

ROLAND MARTIN, CNN CONTRIBUTOR: So, you're telling everybody to go back to the studio. Get me out of these diners.

O'BRIEN: I'm just saying, you know? It's something to think about.

Let me introduce you to our panel. Roland Martin is down at the end this morning, which means I can't grab him when I need him to stop talking.

MARTIN: You know you want to grab me.

(LAUGHTER)

O'BRIEN: David Frum is with us as well. And California Congresswoman Karen Bass is with us.

Nice to have you joining our panel this morning.

REP. KAREN BASS (D), CALIFORNIA: Thank you.

O'BRIEN: Thank you for being with us.

A lot to talk about, of course. It's really focusing this morning on the State of the Union address and the fallout from that address. The president is calling for the preservation of the middle class. And in the speech, called it the defining issue of our time.

That brings us right now to Majority Leader Eric Cantor.

He is live from Capitol Hill this morning.

Sir, you could have come and joined us for breakfast. I told you. I got the French toast right for you. Nice to see you. Thanks for being with us.

O'BRIEN: All right. Well, let's start first and foremost with your take on the president's speech last night. What did you think?

CANTOR: Well, Soledad, you mentioned that the president put out there his vision on how we're going to rescue the middle class. And I'll tell you, we all want to make sure that there's a better direction, more hope for the future for everybody, not just certain parts of our country, but all of us, 100 percent of us together.

The issue, I think, that's going to play out this election is a question of Warren Buffett's secretary. I mean, if you look at, you know, the issue through her eyes, we want her to make more money. We want her to have more hope for the future, but the answer is not to make sure that Washington taxes people more.

And this notion that somehow the income that Warren Buffett makes is the same as a wage income for a secretary, we know that's not the same either. We know that when you make capital gains income, it's much different than when a secretary is paid a wage.

We are not for raising taxes here in Washington so it can spend more money. We want the private sector to grow. That's the message that you will hear from House Republicans is focus on small business. That's the backbone of our economy. That's the backbone of America. We've got to get small business back into the game.

O'BRIEN: So, since you mentioned Warren Buffett's secretary, who was attending the state of the union address last night, let's play a little bit of what the president had to say specifically about her. Listen.

(BEGIN VIDEO CLIP)

OBAMA: Tax reform should follow the Buffett Rule. If you make more than $1 million a year, you should not pay less than 30 percent in taxes. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up.

(END VIDEO CLIP)

O'BRIEN: The president also said, "We can restore our economy where everyone gets a fair shot, everyone doe their fair shake, everyone plays by the same set of rules." And as you and I have spoken about in the past, you said, you know, America is about a fair shot. Does what he says there match what you've been talking about for the last year?

CANTOR: It is about -- we can all agree that we want everybody to have a fair shot. That's what this country was built on. You know, most of the immigrants, certainly not all that have come to this country because some came not at their own volition or will, but the immigrants who wanted to come here and now today in this country, I think everybody believes in America in the very aspirational sense of our country.

And we believe that everybody should have a fair shot. No question, I think Republicans care about those who, frankly, are waking up this morning and don't know where their next meal is coming from. We've got to make sure that they're equipped with the necessary tools so that they can gain a position on that ladder of success. There's no question. We all believe in that fair shot.

But to muddle the issue on taxes, about Warren Buffet and his secretary, is not -- I don't think that that is very helpful in this debate. What we want to do is we want to make sure that we really affect some change here. Stop the policies that have been in place over the last three years that frankly haven't worked.

I mean, we know that our economy's not growing enough. We know we can do better. And that's one of the ways Republicans are putting forward a bold vision for growth in the private sector, in the small businesses of this country so we can get the economy moving again and get people back to work.

O'BRIEN: It's a conversation that we hear along the campaign trail certainly on the GOP side. And so as this whole primary moves into the state of Florida, who ultimately would you rather see, President Romney or a President Gingrich?

CANTOR: Well, you know, Soledad, you and I have spoken. I have a firm position in that any of our candidates will, I believe, win this election because it is going to be a referendum on this president's policies. I think the American people realize --

O'BRIEN: That's a long way of not answering my question.

CANTOR: I told you, Soledad, I have not -- I have not -- I have not taken a position in our primary. You knew that. So what I'm saying is that we have a very stark choice to make in this country. What we're going to see is two different visions playing out. And the people of the country realize the policies that work in the White House don't work.

What do they do when they're faced with something that doesn't work? They say, we ought to try something different, and that's what we're advocating, a much more focused, responsible policy of getting our fiscal house straight here, stop the spending and the government waste and growth in Washington. Focus on the secretary that Warren Buffett has, focus on the small businesses so we can have a better life for everybody.

O'BRIEN: Eric Cantor joining us from Capitol Hill -- nice to see you, sir. Thanks for talking to us.

Let's turn it right to our panel.

He doesn't want to answer the question, you know, President Romney or President Gingrich. And I understand that. He said, you know, he's not going to back anyone specifically

But this is a challenge, especially with Mitt Romney's tax information coming out I think and the conversation, I think, at the State of the Union is not even necessarily Mitt Romney's taxes, it's about American taxes.

DAVID FRUM, CNN CONTRIBUTOR: Well, the president would have liked to have been able to stand up on the last State of the Union before his re-election campaign to say I inherited an economic disaster, I delivered economic recovery.

He can't really say that. Yes, there is a recovery. But it's not a recovery that people are feeling. And his core voters -- younger, poor, more minority, are feeling it less than anybody else. So, he cannot take the victory lap that he would like to.

So, instead of recovery, he is offering a reform project. His big reform is the abolition of the capital gains tax.

O'BRIEN: But this doesn't seem like it's only being, you know, sort of hoisted upon the American people by the White House. The feel is sort of that --

FRUM: If our economy were growing at 6 percent right now --

O'BRIEN: No one would care about taxes, really?

FRUM: That would be the first item in the speech he would deliver next year, but what he would like to be up there to say, the state of our union -- he'd like to give the --

O'BRIEN: The state of our Union is strong.

FRUM: Yes. He'd like to be able to give the Clinton 1996 speech and he can't do it. So, he's offering this in lieu of recovery.

O'BRIEN: Congresswoman?

BASS: Well, I think one thing that he said in his speech was in comparison to what the economy was before, we were in a complete free- fall and that has certainly stopped. I would agree with you it certainly hasn't grown fast enough, but we have been adding more private sector jobs every month.

And then this last month, you know, the first time people who were applying for unemployment has gone down. I think it was the lowest it was in the last four years.

So, we would certainly like it all to be better, but to compare where we were in '09 to now, I think it's a dramatic difference.

O'BRIEN: But income inequality -- I just don't get the sense, David, and correct me if I'm wrong, I don't get the sense that this is sort of a talking point from the White House, like let's talk income inequality. It feels to me that this is a conversation --

FRUM: Look, income inequality grew faster in the 1990s than it's growing today. But it wasn't a top of mind issue because everybody was getting better off.

When people -- when everybody is getting better off, Americans are relatively tolerant. There may be somebody theoretically who's getting better off even faster. But, right, the reason --

O'BRIEN: Roland is behind you going, no, no.

FRUM: An acute issue now -- I'm not saying it's not an issue. But the reason it's so acute right now is because so many people are not feeling the benefits of the recovery.

O'BRIEN: Why do you disagree, Roland?

MARTIN: There are a lot of other people, when we're talking about income inequality.

BASS: A long time ago.

MARTIN: Right. Maybe you were -- it wasn't on top of your mind but, trust me, there were a lot of other folks who were looking at that. And you're right that what has happened is it is finally -- a lot of people have finally come awake because they've been sitting here saying, OK, it was all good, yes, because I had a job. It was all decent.

All of a sudden they realized -- wait a minute, this thing has totally gotten out of hand and, really, when you look at the amount of money, the top 1 percent is earning in comparison to the rest of the folks, people begin to say, wow, I've been voting a certain way. I've been not asking certain questions and now Occupy Wall Street, other people have finally gotten me to realize this is real.

FRUM: One more set to go.

O'BRIEN: David Frum has taken over the table. Go ahead.

FRUM: But the president actually had in his speech a proposal that could do some good, and that is his mortgage refinance plan. The single most important thing we can do now is to bring down the debt load in the household sector.

And his tax message is going to drown out and make it possible to enact that mortgage refinance measure that might do some good. And the question for the supporters of the president is -- do you want to have a conversation about your anger or do you want to have your conversation about something that might be productive?

O'BRIEN: Some people might say --

BASS: Have both.

FRUM: No, you can't. Congress doesn't work that way.

MARTIN: Actually, you can, if you want to.

FRUM: You can have a monologue about it.

(CROSSTALK)

O'BRIEN: And a conversation about anger, I would imagine, and correct me if I'm wrong, is correlated to people's getting re-elected, right?

BASS: But I also think he had lots of proposals in there. You mentioned one. I do think it was an important one, but I think he had a number of proposals in there talking about education, talking about energy, talking about small business.

FRUM: Those are the bad ones.

BASS: I don't think they were bad at all.

O'BRIEN: OK.

(CROSSTALK)

MARTIN: You're watching at home, you don't call that silly.

O'BRIEN: Luckily, we'll have lots of --

FRUM: Everyone has to graduate from high school.

(CROSSTALK)

O'BRIEN: Roland Martin? Roland martin? Roland? People are yelling in my ears. We need to go to commercial break.

We can continue this conversation on the other side. Try not to get in a fist fight, the two of you, in the commercial break.

Straight ahead, coming up at the bottom of our hour -- thank you. Would you do that for me?

We're going to talk to Arizona Senator John McCain. That is straight ahead.

First, though, a look at other headlines. Christine has those for us.

Hey, Christine, good morning again.

CHRISTINE ROMANS, CNN CORRESPONDENT: Good morning, Soledad.

Brand new video for you just into CNN showing the now rescued two kidnapped aid workers in the hands of their captors. This was before U.S. Navy SEALs conducted that daring overnight rescue in Somalia.

Jessica Buchanan and Poul Tisted held for three months by suspected pirates. And this picture released from the White House, President Obama called Jessica's father John Buchanan to tell him that his daughter had been rescued. This is right after the State of the Union.

It explains why the president said "good job" to Defense Secretary Leon Panetta on his way into the State of the Union address. Take a look.

(BEGIN VIDEO CLIP)

OBAMA: Good job tonight. Good job tonight.

(END VIDEO CLIP)

ROMANS: All right. You're looking live at Egypt's Tahrir Square right now where thousands of Egyptians have gathered to mark the one year anniversary of the start of the people's uprising. There are concerns about new clashes today between the military and protesters. These protesters are frustrated by what they see as a slow pace of change since President Hosni Mubarak was forced out.

All right. The Syrian government signing off on a month's extension for Arab League monitors still in that country. It comes after the Arab League voted last weekend to extend the mission.

Meantime, observers from the Gulf Cooperation Council, they have left Syria today saying they were certain the bloodshed and the killing of innocent civilians would continue.

Some of the most powerful minds in government, finance gather at a Swiss ski resort today, Davos, to try to save the world economy. Front and center on day one of the World Economic Forum, the European debt crisis and the threat of a worldwide recession.

And Newt Gingrich and CNN's John King picking up where they left off at last week's South Carolina debate. The former speaker appeared on "JOHN KING, USA" last night after Gingrich slammed John King for starting off with the question about Gingrich's ex-wife interview on ABC. Last night, they went at it again.

(BEGIN VIDEO CLIP)

NEWT GINGRICH, (R) PRESIDENTIAL CANDIDATE: I mean, I'll check with R.C. Hammond in a minute that if they're saying that they're not being honest, they said exclusively the opposite.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: All right. Don't forget to catch the CNN GOP debate in Jacksonville, Florida. That's tomorrow night at 8:00 p.m. eastern. All right. "Minding Your Business" this morning, U.S. stock futures on the Dow and the S&P 500, they're a little bit lower right now, but NASDAQ futures up, and here's why. Because the whole story today is Apple. Apple is set to become the world's largest publicly traded company taking the top spot away from the oil giant, ExxonMobil. The company announced last night it had an amazing blockbuster record quarter to end last year.

The company sold, get this, about 411,000 iPhones every single day in the last three months of the year, more than 171,000 iPads every single day. Top five million the number of MACs for the first time ever. The shares are up 7.5 percent in pre-market trading morning. And I figure it out, Soledad, if you put 10,000 in Apple stocks five years ago, it'd be worth $48,000 this morning.

SOLEDAD O'BRIEN, CNN ANCHOR: I hate those things, because you know I didn't put $10,000 in Apple stocks.

ROMANS: I didn't either.

O'BRIEN: But thank you for telling me what I missed out on. I appreciate that, Christine.

Still ahead this morning on STARTING POINT, what does Nancy Pelosi know About Newt Gingrich? She says, Gingrich getting the GOP nomination will, quote, "never happen."

Plus, in news of the kind of year. Amanda Knox is going back to Italy. You'll remember, she spent four years there on a murder conviction that was then overturned. Now, she says, she loves Italy, and she might go back.

O'BRIEN: Continuing our news of the strange, Alec Baldwin explains his airplane tantrum that got him booted of an American Airlines flight. He'll tell us all about that straight ahead on STARTING POINT. STARTING POINT will be back in a moment.

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O'BRIEN: That's it. The Diner. That's where we are this morning. They've been helping us out, stuffing us this morning, and yesterday as well. We appreciate that. Let's talk about Nancy Pelosi this morning. Is she keeping a secret? Did you hear this interview she did on "JK USA," "John King USA," sounding really, really, really, really, really sure that Newt Gingrich will not be getting the GOP nomination. Here's what she said.

PELOSI: He's not going to be president of the United States. That's not going to happen. Let me just make my prediction and stand by it. It isn't going to happen.

KING: Why are you so sure?

PELOSI: There's something I know. The Republicans, if they choose to nominate him, that's their prerogative. I don't think that's going to happen.

(END VIDEO CLIP)

O'BRIEN: Wow. She sounds very sure.

REP. KAREN BASS, ELECTED TO CONGRESS IN NOVEMBER 2010: Well, that's right. I think -- I've spoken to the leader, but what I think she means is she's somebody who served with him. And I think that she believes that the Republicans would never allow that to happen. And they would do whatever it would take to stop them.

O'BRIEN: Or does it mean, I have information that other people do not have that would scuttle this if I decided to bring it out?

MARTIN: I also talk to Republicans in this town and, trust me, they say that will not be happening.

FRUM: And she's saying, even if he's the nominee, can Newt Gingrich go eight months without doing something career wrecking? No, he can't --

MARTIN: Oh, my goodness. Did he really say that?

O'BRIEN: OK. So, here, exhibit A, against what all of y'all are saying is this, the Quinnipiac University poll looking at how it looks for the GOP primary voters in the state of Florida. Mitt Romney is at 36 percent, Newt Gingrich at 34 percent, closing that gap by a lot.

BASS: Well, I think that's good, frankly. I mean, let the primary go on as long as possible, but whether he's going to get to the finish line, I don't believe that that's possible. Everybody that describes Newt says that he is a hand grenade walking around with his finger in the pin.

MARTIN: I think a lot of people forget, to win a nomination, you've got to get delegates. The magic number is 1,144. So, if you don't get that and you go to the convention, now, all of a sudden, it's a new ball game. Your delegates are only required to be with you, I believe, on the first ballot. After that --

BASS: I can't imagine it getting that far.

FRUM: This thing expands. You have elections on -- set multiple primary elections on the same day. Suddenly, money counts. The inability of Newt Gingrich to persuade large numbers of donors that he is a credible leader, and the ability of Mitt Romney to persuade the means. That Newt Gingrich is going to be walking into advertisements.

He's going to be walking into a wall of lead endorsements. There's a page, I think, that the political or national journal has of who in the party has endorsed Romney versus Gingrich. And not that these endorsements matter or sway people, but they're indications of what the leadership of the party who know these people personally really thinks of what they can do.

MARTIN: He's not on the ballot in some states. He's not on the ballot in Virginia.

O'BRIEN: Isn't it about momentum?

(CROSSTALK)

BASS: Yes, but look at the members of Congress who have endorsed him, and it's not very many. I mean, those people that served with him, that know what --

O'BRIEN: David Frum just told me, endorsements don't matter.

BASS: I think members of Congress do. Who's going to go out and campaign for you? And how many big donors does he have? Is it the one casino moment (ph)?

FRUM: He's the one big donor. Recommendations -- I'm sorry -- endorsements don't matter in the sense they sway voters. They do matter as an indication of what the underlying balance of forces are, your ability to raise money, and that money is going to matter more and more as this election gets more and more national.

O'BRIEN: I don't know. Nancy Pelosi sounded like she had a piece of paper in her desk drawer that she's going to whip out.

(CROSSTALK)

O'BRIEN: All right. Coming up next on STARTING POINT, Senator John McCain's reaction to the "State of the Union" address. he also says that all of these debates, and I think what Roland are number on, 18 or 19? I think 19.

MARTIN: 1,284.

(CROSSTALK)

O'BRIEN: Well, Senator McCain says all these debates are damaging to the GOP candidates. We'll talk to him about that.

Plus, Alec Baldwin talks about that airplane incident. he talks to Piers Morgan about that. You're watching STARTING POINT. For the third time, he's re-addressing it is how he likes to put it. We're back in a moment.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. Coming up next -- I'm sorry. We've got some breaking news. Two foreign aid workers who were kidnapped in Somalia three months ago are free this morning. We'll show you some video of them with their captors. Plus, Vice President Biden's reaction to that.

And also, Senator John McCain will join us. He'll talk about the "State of the Union" address. He'll also say he thinks believes these Republican debates have been damaging to the GOP candidates. We'll talk the solutions with him.

Plus, can the middle class be saved? Don Peck is the features editor at "The Atlantic," and he has an amazing new article about America's middle class. That and much more ahead on STARTING POINT. Stay with us.

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back, everybody. You're watching STARTING POINT. We're coming to you live from the diner in Washington, D.C. Let's start with Christine Romans who has a look at some of the top stories. Christine, good morning.

CHRISTINE ROMANS, CNN ANCHOR: Good morning again, Soledad. We start with breaking news of that daring rescue overnight in Somalia. Brand new video just in to CNN showing the new rescued two kidnapped aid workers in the hands of their kidnappers. This video taken before U.S. Navy SEALs conducted a daring overnight rescue in Somalia, Jessica Buchanan held for three months. Vice President Biden reacting to the mission earlier this morning.

(BEGIN VIDEO CLIP)

JOE BIDEN, U.S. VICE PRESIDENT: The president authorized it yesterday because the special operations forces said this is the time. Jessica's health was beginning to decline. She's a young woman in her 30s. We wanted to act. And they did. And the president followed the recommendation. As I was leaving the White House last night in the situation room it was underway. It was, once again, a remarkable testament to the special operations forces. These guys are absolutely incredible.

(END VIDEO CLIP)

O'BRIEN: The German national suspected of setting nearly 50 arson fires in the Los Angeles area has pleaded not guilty to those charges. Harry Burkhart now faces 100 felony counts related to the alleged arson spree during the New Year's holiday. Prosecutors say Burkhart was angry about his mother's pending deportation back to Germany where she faced charges on another matter.

Legendary Penn State football coach Joe Paterno will be laid to rest later today after a final viewing period. It's been a long line of mourners on the state college campus to view Paterno's body, to pay their respects. A public memorial will be held tomorrow at Penn State.

Iowa is the first stop as President Obama kicks off his campaign reelection tour today. The president will sound the same themes from his state of the union address, emphasizing fair play, challenging Congress to level the playing field for all-Americans. He'll travel to five battleground states over the next three days.

Arizona Congresswoman Gabrielle Giffords will submit her final formal resignation letter today so she can concentrate on her recovery from a gunshot wound just over a year ago. In her letter Giffords says "I will recover and will return." She attended last night's State of the Union and in a rare bipartisan moment she received a standing ovation.

Amanda Knox's lawyer says Amanda loves Italy. She wants to go back despite having spent four years in prison there before her murder conviction was overturned last year. The lawyer says the 24-year-old Knox, she might return to testify as a witness for her parents. Her parents were charged with slandering police in Perugia.

CNN's Piers Morgan in a wide-ranging interview with actor Alec Baldwin, good stuff here. The "30 Rock" star talks about Hollywood, his future in politics, his recent dust up with American Airlines over words with friends.

(BEGIN VIDEO CLIP)

ALEC BALDWIN, ACTOR: I was on this plane and then all of a sudden I was in the presence of someone for whom all of those rules changed. We were going to have a very, very Soviet level of enforcement of the rules, if you will. It was done very brutally. This woman was very harsh and very, very snappy. And I reacted badly to that. I got really, really very upset. Then I was asked to get off the plane and get on another plane. And to the extent, as I said, that I inconvenienced anybody else on the flight, I was very, very sorry.

(END VIDEO CLIP)

ROMANS: You can see Piers Morgan's full interview with Alec Baldwin at 9:00 eastern time here on CNN.

O'BRIEN: Christine. I'm very sorry, but she was acting like a Soviet era law enforcement harsh, brought tall, snappy -- I'm sorry.

ROMANS: Don't snap at Alec Baldwin. Do not snap at him.

O'BRIEN: You know, she is an over-worked flight attendant. Give him or her a break and put your iPad down. For god's sake. Thank you, Christine, for that update.

President Obama demanding action from Congress. That was part of what he said in his third annual state of the union address last night. He laid out his economic agenda as well, also talked about a political roadmap for the 2012 presidential campaign. And he said the state of the union is getting stronger.

O'BRIEN: Let's get to Republican Senator John McCain of Arizona who is our guest this morning. Nice to see you, sir. Thanks for joining us. Wish you were here hanging out and having breakfast with us, but maybe another time. Why don't you start with a little reaction to the president's State of the Union address, sir?

SEN. JOHN MCCAIN, (R), ARIZONA: Well, I think it was a great campaign speech, obviously stoking the class warfare issue.

But, you know, this may be a little different take than you're getting from others, but I was astounded by his praise for Iraq since Iraq is unraveling. He said that anybody who will tell you that America's not perceived to be in decline doesn't know what they're talking about. I know what I'm talking about, and I'm telling you that I talked to foreign leaders literally every day. They believe America is in decline. They believe we are withdrawing, and they believe we are weak. And that is a fact.

O'BRIEN: So what's the solution to that? As we look toward the people who would like to replace President Obama. Go ahead.

MCCAIN: I think the solution is to lead from in front, to lead, for example, instead of fulfilling a campaign promise to get out of Iraq, leave a residual force there as a force of stability. Don't order withdrawal from Afghanistan for pure political reasons overriding the recommendations of the military that you appoint to these positions of authority.

In Libya there was thousands of more casualties because we didn't use the full weight of American air power. When is the president going to speak up for the people in Syria that are dying in the streets? One of the worst acts of any president in recent history was when he failed to stand up and speak up for the demonstrators in the streets in Tehran who were crying out, Obama, Obama, are you with us, are you with them? No, leading from behind doesn't work and America, and the world knows it.

O'BRIEN: I want to talk to you a little bit about the debates because you've been critical about the number of debates. I think we're on debate number 19, which will be on Thursday. You've said that they're damaging to the party. Let me play you a little clip of the highlights or maybe a better way to put it is the low lights of what's come out of the debates on the GOP side. Listen. (BEGIN VIDEO CLIP)

GOV. RICK PERRY, (R-TX) FORMER PRESIDENTIAL CANDIDATE: If you will cheat on your wife, if you will cheat on your spouse, then why wouldn't you cheat on your business partner or why wouldn't you cheat on anybody for that matter?

MITT ROMNEY, GOP PRESIDENTIAL CANDIDATE: The speaker was given an opportunity to be the leader of our party in 1994, and at the end of four years he had to resign in disgrace.

I'm looking forward to finding your facts on that.

PERRY: I'll tell you what the facts are.

ROMNEY: Rick, again, I'm speaking. I'm speaking. I'm speaking.

(CROSSTALK)

NEWT GINGRICH, GOP PRESIDENTIAL CANDIDATE: You've been walking around this state saying things that aren't true.

(END VIDEO CLIP)

O'BRIEN: That's just the short reel, sir. I know you know there's a much longer reel of some of the low lights. What would be a better way to show that the candidates are saying but not have all these debates?

MCCAIN: Soledad, I think there should be a limited number of debates. It has now deteriorated into the kind of exchanges that you talked about. The purpose originally of debates were to give the candidates a chance to expose their agenda and view for the future of America, what they would do as president. Now they are deteriorating obviously into serious personal attacks.

And what that does, it drives up the disapproval rating of the people who are in these debates, thereby harming their ability, whichever one wins, which I will believe will be Mitt Romney, and very damaging in the general election. If this thing drags out for months with these kinds of debates, it's going to make it all the more difficult for that -- for the nominee to prevail.

And it's really unfortunate that it's deteriorated. And frankly, the media looks for the gotcha moment or the attack moment rather than, frankly, the view that an agenda that the candidates have for the presidency and for the country.

O'BRIEN: Let me ask you a question as you look toward the -- well, you know, that's a whole debate that I'd love to have with you. We'd need much more time than we have. You do raise a good point but I don't think that's the only point.

But I want to move on and talk about your candidate. You've obviously been supporting Mitt Romney. And as he heads to Florida, Florida's a state that you won back in 2008. You beat Mitt Romney. You came in with 36 percent of the vote there, had he 31 percent. What advice would you give him? The tax issue is still a problem. What do you tell him going into Florida?

MCCAIN: Well, I think he's got to be very busy. I know that Florida is one of those states that's been hurt very badly, as Arizona has, by the housing crisis. And talk a lot about that. How we would keep people in their homes and stop them. Nearly half are underwater.

I think clearly the economy is a major issue in Florida, but there's also a lot of military and a lot of retired military and a lot of military bases there. I think maybe he could be talking about national defense and security as well. I'm sure he'll do well.

O'BRIEN: Senator John McCain. Again, I'd like to have that conversation with you about the debate process. I think we can do that in 30 minutes and really cover a lot of ground.

MCCAIN: Let me say, I understand the media is covering it the way they are. I think it's the problem with way too many debates under circumstances that I think time could be better spent campaigning. It takes out a full three days out of their campaigning when you do that. One day to prepare, one day to have it, and one day after.

O'BRIEN: So then what would your number be if you could, you know, pick a number?

MCCAIN: Far less.

O'BRIEN: I think we're at number 19. Like five, 10?

MCCAIN: Yes, something like that. The presidential campaign, there is a requirement for three, vice presidential is one. We have certainly gone way beyond that number as you know.

O'BRIEN: Senator John McCain joining us. Nice to see you, thanks.

MCCAIN: Thank you.

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: The presidential elections are only about two and a half months. If you look at the period of time that this election takes place, there are three in that period of two-and-a-half. If you go 12 months, you're going to have 10, 15, 20 debates.

UNIDENTIFIED FEMALE: The spin keeps changing, so how can you limit --?

O'BRIEN: People drop out. I agree with the senator on that. I think 19 has been a lot. We have to take a short break.

MARTIN: They can say no.

O'BRIEN: We'll take a short break. Ahead on STARTING POINT, have you guys read this article in "The Atlantic," "Can the Middle Class be Saved." Don Peck is the Features editor at "The Atlantic" and he's going to join us. You're watching STARTING POINT. Short break. We're back in a moment.

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back, everybody.

One of President Obama's main themes last night was protecting the middle class and the numbers show really what is a squeeze on the middle class. Now that is real. In 2007 the median income was just over $52,000. Look at 2010, though, that number is $49,000. That is a 6.4 percent drop since the recession and the lowest since 1997.

Americans increasingly believe that there is a growing class conflict. If you look at some numbers from Pew Research, 66 percent of Americans last year say there are very strong or strong conflict between rich and poor.

Author Don Peck joins us this morning. You have written what I think is one of the best assessments of what has happened to the American middle class. The book is called "Pinched." And it's off of an article that you wrote for the "Atlantic"; it was like cover story.

So where did the middle class go?

DON PECK, FEATURES EDITOR, ATLANTIC MAGAZINE: Well, they're not going anywhere right now. You know it's interesting in this recession, you mentioned the income drop for the middle class. There was also a huge loss of wealth because the middle class carries most of its wealth in housing unlike the rich.

So what we saw which is highly unusual in this recession was a much larger loss of wealth for the middle class than for rich Americans. To some extent that's simply going to take a long time to rebuild. I do think that in the State of the Union last night, you know, we saw some encouraging notes from President Obama.

I think the most important thing for the middle class right now is a faster economic recovery from the great recession, and I was encouraged that I heard a lot about infrastructure investment, about the payroll tax extension. About accelerating the recovery, less about deficit reduction, deficit reduction is going to be very important for the economy once it's healthy again, but -- but pursuing it too early could choke off a recovery that is now beginning.

O'BRIEN: One of the little things that I thought was the most interesting about your article and your book was you really analyzed sort of the role of American men. Fascinating to see the plight of men and it's -- it's bad.

PECK: Absolutely. You know, in 1967 the average man in his prime working years -- excuse me, men in their prime working years, 97 percent of them were working. Today that number is 76 percent. So men haven't responded to an economy that has moved away from blue collar work, away from outdoor work.

(CROSSTALK)

O'BRIEN: Construction.

PECK: Away from construction, away from manufacturing. They haven't gotten more education unlike women. They haven't moved into growing service sectors, like health care and education.

I think one of the biggest problems that we face in the long term right now is how to get men back into good jobs. How to get men working again. Not just for their own sake but for American families because when men are struggling economically, when they're not working, what you see are large family problems as well. Fewer marriages, more divorces, more children growing up in single-parent households.

O'BRIEN: The President has talked about a recovery, but really when you look, in your book you analyze sort of who's really recovering? And it's not the people in the middle class and lower middle class who are sort of bouncing back.

PECK: Yes, that's right. I mean, I think when you look at areas like Washington, D.C., where we are, when you look at Manhattan, when you look at Silicon Valley, when you look at kind of -- the enclaves of the rich, of the creative, of the highly-skilled, those places have been bouncing back. A lot of wealthy Americans have been bouncing back. You see that a lot less in Phoenix, in Tampa, in -- in Las Vegas and former middle class Meccas.

So -- so yes, we're seeing in this recession, in this recovery a kind of a continuation and acceleration of some of those divisive forces that have been really bifurcating the country for quite a long time.

O'BRIEN: The book is called "Pinched". I know David Frum has downloaded it in the three and a half minutes that we have been talking. I thought this was so great and just so revelatory (ph) about sort of all the processes at work and that have been work in the American economy for decades. So thanks Don Peck joining us. The article is also in the "Atlantic" so people can Google it as well.

PECK: Thank you Soledad.

O'BRIEN: Coming up next they've been talking about date night at State of the Union so we'll review everyone. We'll talk about who paired up with whom. That's in our "Reveal" up next. Stay with us.

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UNIDENTIFIED MALE: Is that Devo?

O'BRIEN: I was going to say our music is all over the map today. Miral (ph) call me we've got to work this out. We are Devo. Yes.

(INAUDIBLE)

O'BRIEN: Yes, it's a little weird.

(CROSSTALK)

All right. All right. All right. It's like my only one ignorant point.

UNIDENTIFIED MALE: Donald had something.

O'BRIEN: Ok, it's time for "The Reveal" this morning. We have been talking, of course, all morning about the State of the Union Address and the President's call for bipartisanship. And there were some, some, some signs of it last night, including in the seating arrangements.

In a tradition that was started last year after the shooting of Congresswoman Gabby Giffords, more than 180 members of Congress sat with members of the opposing party and they called it "Date Night".

The main supporters, Alaska Senator Lisa Murkowski and Colorado Senator Mark Udall sat together and the President's speech have parts of it, that both parties agreed to like this part --

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: For the first time in two decades Osama bin Laden is not a threat to this country.

(END VIDEO CLIP)

O'BRIEN: But perhaps the most bipartisan moment of the evening involved Republican Congressman Jeff Flake of Arizona because his seatmate was the Democratic Congresswoman Gabrielle Giffords. As you know, she's still recovering from that brain injury -- that shooting last year.

So Flake not only sat next to Giffords, he was the only Republican in the chamber who would stand when other members of his party did not because he always had to help her to her feet. It was really, you know, everyone would applaud, he would also stand and help lift her to her feet and then help her sit down again. It was quite a nice moment to watch.

We say, America, that kind of bipartisanship makes America great. Maybe we'll see more of that in terms of legislation, huh?

ROLAND MARTIN, CNN CONTRIBUTOR: Yes, right. Yes, right.

REP. KAREN BASS (D), CALIFORNIA: I do think that there's a lot of times when we do work together and it just doesn't make news. For example, one issue that I work on is foster care. I have a bipartisan committee with Tom Marino from Pennsylvania. We're getting ready to --

O'BRIEN: And it passed and went through?

BASS: -- well, no, we've just gotten started.

O'BRIEN: OK.

BASS: But you know, we did work on a couple of pieces of legislation last year and actually the President did sign it when we did the child welfare bill. But there are times when we do work together. I think it's just a lot times --

O'BRIEN: It is time for our "End Point." Congresswoman, we will begin the "End Point" with you.

BASS: I think the main takeaway from last night for me was the fairness. The way to rebuild our economy and rebuild our nation is a fair -- fair shot, fair shake. Play by the same set of rules.

O'BRIEN: It's going to definitely be part of the campaign I am sure. David Frum?

DAVID FRUM, CONTRIBUTING EDITOR, "NEWSWEEK": Two good things in the President's speech: the call for the mortgage relief plan, and the urge to make the senate less of a (INAUDIBLE) where nothing happens.

Bad things this President's insistence on direct government investment in the energy sector. That is an invitation to boondoggles and his call for raising the rate on capital gains. Capital gains are taxes on transactions, not a tax on income.

O'BRIEN: So, you know, "End Point" is end point. It's not end points.

We'll give you a pass.

FRUM: I gave you four.

MARTIN: Right. Last night, the President talked about equal pay for work for women and most of the men in that chamber stayed seated. Every wife out there for all the men in Congress tell them no sex until their daughters and aunts and their sisters tell them, dad, uncle, how dare you not say you do not support equal pay for women. That is shameful for men to not sit here and back women.

O'BRIEN: I agree with your point.

MARTIN: Cut them off.

O'BRIEN: But not your delivery.

MARTIN: Cut them off.

O'BRIEN: Had I not mentioned yesterday that my mother watches this show?

MARTIN: What? I didn't curse. I'm trying to give women the --

O'BRIEN: OK. Yes. You're totally taking us down the drain.

Roland, I thank you. To our panelists, as always. Let's get to Kyra Phillips, and STARTING POINT wraps up. We'll see you back here in New York tomorrow morning.